Sponsoring Company Finance, Investment and Pension Plan Funding
Bibliographic Data
| ID | 9716089 |
|---|---|
| Authors | David C Webb (0009-0009-9313-385X, London School of Economics and Political Science, corresponding author) |
| Year | 2007 |
| Volume | 117 |
| Issue | 520 |
| Pages | 738-760 |
| Publication date | 2007-04-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2007.02048.x |
| OpenAlex | W2166144509 |
| Language | EN |
| References cited | 32 |
This article presents a model of the interaction of a company's financial and real investment decisions with the financing of its defined benefit pension plan. The pension plan deficit is a debt of the company, with explicit funding requirements and priority in the event of company insolvency. Pension plan deficits and options on future deficits and surpluses affect investment incentives as does the size and composition of company debt. We examine incentives for the firm to pay dividends rather than fund the pension plan and incentives to overfund the pension plan. The effects of pension benefit insurance and minimum funding requirements are shown. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007
Asset allocation · Business · Debt · Dividend · Economics · Incentive · Insolvency · Investment (military · Pension · Pension plan · Plan (archaeology · Portfolio · Corporate Finance and Governance · Finance · Financial Reporting and Valuation Research · Insurance and Financial Risk Management
| Citation velocity | historical |
|---|---|
| Highly cited | No |